In early European deals on Tuesday, the British pound weakened against other major currencies as the political uncertainty following the elections in Greece and France prompted traders to reduce holdings of risky assets.
The results of the parliamentary elections from Greece showed that the two main parties - the conservative New Democracy and the left-wing Pasok - suffered huge defeats, while those opposed to more cuts won almost 60 percent support.
Concerns remained about the possibility of a new left-wing coalition government in Greece, which vowed to end austerity measures and reject the terms of Greece-Troika bailout deal.
Meanwhile, International Monetary Fund Managing Director Christine Lagarde has urged governments to cut budget deficits only 'gradually' with a larger focus on reforms aimed at growth and jobs.
Lagarde said most advanced countries are proceeding with fiscal consolidation at a "prudent" pace. For countries mired in recession, this will only help to worsen the economic conditions.
In economic news, house prices in the U.K. declined in April reversing March's improvement as the positive impacts from stamp duty concession on some properties and mild weather faded.
The Royal Institute of Chartered Surveyors said its house price balance slipped to -19 in April from -11 in March. The March figure was revised downward from the originally reported -10.
The pound that ended yesterday's trading at 1.6192 against the dollar is now worth 1.6138. The next downside target level for the pound-dollar pair is seen at 1.612.
Against the yen, the pound is currently worth 128.87, down from an early Asian session's 4-day high of 129.61. If the pound-yen pair weakens further, it may likely target the 128.4 level. At yesterday's close, the pair was quoted at 129.39.
The pound is presently worth 0.8070 against the euro and 1.4895 against the franc, compared to highs of 0.8052 and 1.4928, hit respectively at 2:30 am ET. On the downside, the pound may target 0.808 against the euro and 1.487 against the franc. The pound closed yesterday's trading at 0.8064 against the euro and 1.4907 against the franc.
Looking ahead, German industrial production for March is due at 6 am ET.
by RTT Staff Writer
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